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Mixed Views on Cuomo as Attorney General

Attorney General Andrew M. Cuomo, left, used Mary Reinbold Jerome’s experience with health insurance reimbursements to challenge the industry.Credit
Office of New York Attorney General Andrew M. Cuomo

The letter arrived in the New York State attorney general’s office in late 2006 — a desperate note from a woman in Yonkers with ovarian cancer. Her health insurer’s reimbursements were so inexplicably low she was drowning in unexpected bills.

Andrew M. Cuomo learned about the woman, Mary Reinbold Jerome, days later, soon after he was sworn in as the state’s 64th attorney general, and he quickly saw that her predicament was part of a much larger problem: more than a dozen large health insurers were routinely using flawed data to shortchange consumers for reimbursements on out-of-network medical costs.

Over the next two years, Mr. Cuomo and his staff built cases against 12 companies and won settlements from them totaling $100 million. With that cash, Mr. Cuomo bankrolled what he called a bold experiment to cure a health care system that routinely gouged consumers: five upstate universities would design a new system for determining health care reimbursements, and a new nonprofit organization, not beholden to the insurers’ bottom lines, would operate it.

But nearly two years after Mr. Cuomo took credit for ushering in “historic nationwide health insurance reform,” insurance companies are still using the flawed data to set payments to consumers, while the new system is under construction. Almost none of the money won in the settlements went to those who had been undercompensated. And the executive put in charge of monitoring the new reimbursement system — with a fee of $183,000 for what amounts to part-time work — is a handpicked official who had worked for Mr. Cuomo’s father when he was governor.

Mr. Cuomo, who succeeded Eliot Spitzer as the state’s top lawyer and is now the Democratic nominee for governor of New York, is widely credited with having built impressively on Mr. Spitzer’s considerable prosecutorial legacy: he recruited top-flight lawyers, like Steven M. Cohen, a former federal prosecutor, and pointed them at cases meant to protect consumers of all kinds, from New Yorkers hounded by unscrupulous debt collectors to college students ill served by the cozy relationships between educational institutions and lenders.

Mr. Cuomo’s office also prosecuted one of the most significant public corruption cases in recent state history, exposing and winning the convictions of many of those caught up in a pay-to-play scheme involving millions of dollars of the state’s public pension funds.

But the praise is neither universal nor complete, and there are many who assert that Mr. Cuomo has, not unlike his predecessor, been more interested in headlines than in undertaking the tedious chores needed to bring lasting reform, and that he has mishandled, sidestepped or prolonged some public integrity cases.

For example, an investigation into whether the administration of Mayor Michael R. Bloomberg and some public officials violated lobbying laws in their redevelopment efforts is still unresolved after two years. (Mr. Bloomberg last month endorsed Mr. Cuomo’s campaign for governor.)

Also cited for criticism is Mr. Cuomo’s handling of an investigation requested by Gov. David A. Paterson into the Paterson administration’s intervention in a domestic violence case involving one of the governor’s aides. At the start of the investigation, Mr. Cuomo and Mr. Paterson, both Democrats, were expected to be rivals to run for governor. Mr. Paterson soon dropped his candidacy, but Mr. Cuomo nonetheless appointed a former state judge to take over the politically charged inquiry.

“This was his job,” said Lloyd Constantine, a lawyer and friend of Mr. Spitzer who has worked for two former attorneys general. Convinced that political expedience eclipsed duty, Mr. Constantine said: “You’re chief legal attorney of the state. You may not want to do this, but it’s your job.”

On Wall Street, where Mr. Spitzer made his mark, making examples out of malefactors, Mr. Cuomo has been chastised by some for going after far fewer individual villains. His office, though, points to some big cases that took on Wall Street practices, like one he brought against the debt-rating agencies and another that forced the underwriters of auction-rate securities to agree to a $60 billion settlement.

Mr. Cuomo’s team of lawyers also argue that they have done wonders with the office’s limited criminal powers and a $200 million budget that continues to get lopped by statewide budgetary pressures.

“It’s about the cases,” Mr. Cohen said. “That’s become our mantra. We let the cases do the talking.”

Mr. Cuomo’s campaign against health insurers over reimbursements, then, appears to underscore what some regard as the office’s strengths and others see as its shortcomings.

There is no question the case was ambitious, that the financial settlements were significant, and that the one out of three Americans who buy policies that allow them to go out of network for care may finally get a square deal. But those who were harmed have, for the most part, been left to recoup their money through private lawsuits.

Officials involved in the effort to build the new reimbursement system say the first piece of the promised fix is coming in January, when revisions to the existing benchmarks for dental care and outpatient services will be issued.

“It is a really big deal to have taken it on,” said Charles Bell, programs director for Consumers Union, the advocacy group. He considers these settlements the biggest accomplishment of Mr. Cuomo’s term, especially when state insurance commissioners looked away for so long.

A Patient’s Battle

In 2006, Ms. Jerome, 62 at the time, was feeling bloated and blue. She put off getting checked, according to her daughter, because her regular doctor, part of her insurer’s preferred network, was on vacation, and she was aware of the penalty that insurers impose on policyholders who go out of network.

After seeing her doctor, she learned she had cancer, and the fight of her life was ahead. But as she testified in writing before a United States Senate committee in March 2009, she said she never figured that “dealing with my insurance company would be my greater battle.”

An intrepid woman who taught English in the Peace Corps in Morocco and visited 30 countries before settling in Yonkers, Ms. Jerome was living on her own when she got sick. Following the advice of her doctor, she sought care at Memorial Sloan-Kettering Cancer Center. The hospital was not part of her insurer’s preferred network, but she had an expensive policy that allowed out-of-network coverage and she assumed she could afford any unreimbursed costs.

Photo

NancyMarie Bergman, a cancer survivor, is on the board of a group to track medical costs.Credit
Ruby Washington/The New York Times

She ended up with nearly $80,000 in bills that threatened to clean her out, and got nowhere appealing the charges to her insurer, Oxford, a unit of UnitedHealth Group. “Over and over again,” she testified, “Memorial Sloan-Kettering was not being reimbursed at an amount that was anywhere close to the cost of their services.”

Her best friend, Linda Lane, remembered this week, “It was a constant worry for her.”

Frantic, she fired off requests for help, including to New York State’s insurance commissioner and its attorney general.

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Her Dec. 20, 2006, letter got plucked from a pile by an alert paralegal in the attorney general’s health care bureau, Christine D’Ippolito, and was passed up the line.

The office’s top officials thought Ms. Jerome’s case might be emblematic of bigger issues, and she became the catalyst for the two-year investigation that followed.

“She had no ability to fight because she had no access to the information,” said Linda A. Lacewell, a special counsel in the office. “She’s obviously a smart person, and if she couldn’t do it, what does that say for everybody else?”

The focus of the investigation soon became Ingenix, the industry’s clearinghouse for much of the information that helps determine the going rate for medical services. Vacuuming up information from doctors and other health care providers, Ingenix calculates the “usual, customary and reasonable rate” for medical services in different geographic areas. Those figures are then consulted by health insurers to determine how much they, in turn, will pay consumers who go out of network.

Mr. Cuomo’s office concluded that Ingenix had muddied the picture by systematically “failing to collect” some numbers and deleting others, mostly higher ones, that it deemed to be statistical “outliers” or aberrations. Together, the collection practices helped to depress the numbers that helped set reimbursements.

One breakthrough came when lawyers for the attorney general’s office consulted a class-action lawyer, D. Brian Hufford, who had been fighting a variety of cases on this point since the late 1990s, mostly on behalf of doctors. He and his colleagues had visited the attorney general’s offices at 120 Broadway in Manhattan several times when Mr. Spitzer was in charge and shared some findings that emerged from his lawsuits. But their efforts to involve the New York office in the issue on behalf of consumers went nowhere, he said, until Ms. Jerome came along.

This time, the state’s lawyers were deeply interested in what he had to say. He emphasized to them that UnitedHealth had bought Ingenix from an industry consortium in 1998. So, each time Ingenix made decisions about data it collected or discarded, its parent company had an interest in keeping those numbers low.

“Attorney General Cuomo was very concerned about the conflict-of-interest question,” Mr. Hufford said.

In the end, the collaboration brought results. Mr. Cuomo announced the first of several sweeping settlements involving the insurance issue on Jan. 13, 2009. The next day, Mr. Hufford announced a $350 million settlement of the lawsuit he had brought against UnitedHealth in federal court in New York.

The night that Mr. Cuomo was on the news announcing the first settlement, NancyMarie Bergman, a Long Island woman, recalls telling her husband: “He’s talking about me. That is my case. That is what I’ve been fighting for the last six months.”

Having received a diagnosis of breast cancer the year before, she said she had checked with her insurance company to estimate what her mastectomy might cost if she went out of network. Stunned to learn later that she owed $24,000 after the initial surgery, eight times as much as she had expected, she said she considered skipping the two operations she needed for reconstructive purposes. “When you’re having to worry about trying to put your life back together, no one wants to worry about having to get your insurance benefits,” said Ms. Bergman, who went ahead with the operations, unsure who would pay.

Changing a System

The series of settlements sought not only to punish the insurers but also to produce a cure for the problems. A nonprofit group, now known as Fair Health, was set up to become, in effect, a new arbiter of “usual, customary and reasonable” prices. Insurers would be required to switch their business over to it, and Ingenix’s database would go dark.

But tangible progress has yet to be achieved. Fair Health’s system is not yet up and running, and in the intervening months many insurers have continued to consult Ingenix’s flawed figures.

“The complexity of this undertaking cannot be overstated,” Fair Health’s president, Robin Gelburd, said of the work involved in creating a new reimbursement system.

Dietrich Snell, a prominent lawyer who left the attorney general’s office for private practice a few months after Mr. Cuomo arrived, said the delays were understandable given the office’s limited resources to track the ultimate outcomes of its litigation.

“It’s important to be fair to them,” Mr. Snell said. “They have a lot of resource challenges in terms of the number of people who can administer settlements. So, once the news impact has taken place, it’s very hard to do effective follow-up.”

One way the office stretches its resources is by using outside monitors. In this case, the settlements called for a monitor to keep the project on track and in keeping with its objectives. The monitor, according to the original settlements, was supposed to be selected by the lead university involved.

But it appears that Mr. Cuomo’s office had a say, too, that led to the hiring of Arthur Y. Webb, an executive who served Mr. Cuomo’s father, Mario M. Cuomo, when he was governor. He signed a one-year, $183,000 contract in July. The pay works out to $450 or so an hour given the 400 hours Mr. Webb is expected to put in.

Ms. Lacewell, the special counsel, defended Mr. Webb’s fee, given the project’s size and his extensive experience in government and health care. “It’s a public service,” she said, “and he’s doing it at a discount.”

One change is already clear: Fair Health awarded one of the nine seats on its board to Ms. Bergman, the cancer survivor, as a voice for consumers.

Reform, though, came too late for Ms. Jerome, who died in June at age 66. Her daughter, Eva, said her mother was nonetheless grateful that someone had taken up the cause: “I remember her saying that ‘they settled it and it won’t affect me. But I’m really glad it will help people, particularly people who wouldn’t have had the savvy or resources to do something.’ ”

A version of this article appears in print on October 27, 2010, on Page A21 of the New York edition with the headline: In Health Case, Insight Into Cuomo Record as Attorney General. Order Reprints|Today's Paper|Subscribe